Aereo suspends service, promises refunds to subscribers

On Saturday morning, Aereo subscribers woke to discover that their streaming TV and DVR service would stop working at 11:30am ET. The bad news came via an email from CEO Chet Kanojia, who announced that Aereo has “decided to pause our operations temporarily” while it plans next steps.

The news was inevitable after a 6-3 ruling from the Supreme Court this week that sided with the country’s big broadcasters over Aereo in a closely-watched copyright case.

Kanojia, who described the court ruling as a “massive setback for consumers,” also stated that Aereo subscribers will receive a full refund for their last month of service.

While Aereo is portraying the shutdown as temporary, it’s unclear how — of if — the company can rise from the legal ashes. Despite the obvious appeal of an internet based mobile TV service that offers a small bundle of channels, the TV industry is reluctant to change its current business model, which is based on selling large packages of channels, many of which consumers never watch.

One option for Aereo may be to accept the Supreme Court’s declaration that it is a cable company, and seek a license from the broadcasters, although the economics of this might prove prohibitive. Kanojia has so far resisted this route, however, and pointed out that Aereo just rents antennas that lets consumers watch broadcast TV that is free to begin with.

The full letter is below. Here’s my mad-as-hell take on the Supreme Court’s folly, and my colleague Derrick Harris’ explanation on what it means for the cloud.

A Letter to Our Consumers: Standing Together for Innovation, Progress and Technology – An Update on Aereo

“The world hates change, yet it is the only thing that has brought progress.” –Charles Kettering, inventor, entrepreneur, innovator & philanthropist

 A little over three years ago, our team embarked on a journey to improve the consumer television experience, using technology to create a smart, cloud-based television antenna consumers could use to access live over the air broadcast television.

On Wednesday, the United States Supreme Court reversed a lower court decision in favor of Aereo, dealing a massive setback to consumers.

As a result of that decision, our case has been returned to the lower Court. We have decided to pause our operations temporarily as we consult with the court and map out our next steps. You will be able to access your cloud-based antenna and DVR only until 11:30 a.m. ET today. All of our users will be refunded their last paid month. If you have questions about your account, please email [email protected] or tweet us @AereoSupport.

The spectrum that the broadcasters use to transmit over the air programming belongs to the American public and we believe you should have a right to access that live programming whether your antenna sits on the roof of your home, on top of your television or in the cloud.

On behalf of the entire team at Aereo, thank you for the outpouring of support. It has been staggering and we are so grateful for your emails, Tweets and Facebook posts. Keep your voices loud and sign up for updates at – our journey is far from done.

Yours truly,

Chet Kanojia